Construction itself however is still far off. The significance of the move is that parties can now submit their objections to the plan and only after these are addressed planning can go forward.
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The plan includes the construction of a commercial center and educational establishments to be built around the Shai District Police station, in addition to 2,000 housing units.
Any further discussion on the plan will warrant the approval of the coordinator of government activities in the territories.
A source familiar with the details of the plan estimated that actual construction is still far off. "Granted, there is some progress but I am sure that any interested party will submit his opposition and cause the matter to drag out," he said.
"It's obvious that a government decision could speed things along but is that really the prime minister's intent? Time will tell."
During the committee meeting, Meretz Chairwoman Zahava Gal-On called on the government to immediately halt the plan.
"The Netanyahu government's price tag policy is leading Israel into international isolation. Building thousands of housing units in this area is a crazy and irresponsible move meant to prevent the establishment of a Palestinian state and destroy the two-state solution."
A day after the UN's General Assembly voted to recognize Palestine as a non-member observer state, Israel announced it was advancing plans to build 3,000 housing units in Jerusalem and the West Bank, prompting worldwide condemnation.
Various European nations as well as Australia and Brazil summoned Israeli ambassadors in protest of the move.
Britain warned it would consider harsher measures if Israel does not withdraw the construction plan. Prime Minister Benjamin Netanyahu stressed that he will not succumb to international pressure.
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